Understand Price Localization
- What is parity pricing?
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The parity price of a digital product is its price adapted to the purchasing power of another country.
Let's say you make $US10/hour in America and $5/hour in Brazil. Buying a $US10 product online requires you to work 2 times more. Therefore parity price of that product in Brazil is $US5.
- What's the difference between B2B and B2B parity prices?
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Individuals don't have to same purchasing power then businesses. We've created a B2B Parity price index to help you adapt your parity prices for a B2B audience. These numbers are general recommendations and can always be improved. If you need specific pricing advice, reach out, we'd love to help.
- How is Parity price related to the currency?
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It's not. If we consider the example above, the parity price of our $US10 product for the average Brazilian customer is both $US5 or $BR25.78.
You can offer Parity pricing without using foreign currencies, by giving out localized promotions, or prices. It will remove some friction, but not all of it (see why below).
- What about currencies?
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By offering your customers to pay in their local currencies, you help them save between 1% and 6% on conversion fees. For you, it means lower friction during checkout, and sales increase by 14% on average.
If you're wondering which currencies you should offer first to maximize revenues for the least amount of risk, read our Top 20 currencies for your SaaS article.
- How did you come up with these numbers?
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Parity-related numbers are from OECD and World Bank. Currency rate are provided by xe.com and updated daily.